Tuesday, January 19, 2010

Historically Massive Sting Operation

Back in November, Assistant Attorney General Lanny Breuer, in a speech (see here) before an FCPA audience said that "[a]lthough many of these cases come to us through voluntary disclosures, which we certainly encourage and will appropriately reward, I want to be clear: the majority of our cases do not come from voluntary disclosures. They are the result of pro-active investigations ...."

Today, the DOJ announced (here) the indictment of 22 (no that is not a typo) "executives and employees of companies in the military and law enforcement products industry" for engaging in a scheme to bribe foreign officials to obtain and retain business.

Per the DOJ release, the 16 unsealed indictments "represent the largest single investigation and prosecution against individuals in the history of DOJ's enforcement of the FCPA."

Just how pro-active was this investigation?

According to the release, the "indictments allege that the defendants engaged in a scheme to pay bribes to the minister of defense for a country in Africa."

However, there was a catch.

There was "no actual involvement from any minister of defense."

Rather, the defendants "allegedly agreed to pay a 20 percent 'commission' to a sales agent who the defendants believed represented the minister of defense for a country in Africa in order to win a portion of a $15 million deal to outfit the country's presidential guard."

Just who was the sales agent?

An undercover FBI agent, according to the release.

The names of the indicted individuals as well as the indictments can be found here. Each of the indictments allege substantive FCPA violations, conspiracy to violate the FCPA, and conspiracy to engage in money laundering.

All but one of the individuals was arrested yesterday in Las Vegas. The other was recently arrested in Miami.

In the same November 2009 speech, Breuer noted that the FBI - FCPA specific squad was "growing in size and in expertise" and the release notes that the "investigation is the first large-scale use of undercover law enforcement techniques to uncover FCPA violations..."

Point taken, as the DOJ release notes that "approximately 150 FBI agents executed 14 search warrants" in locations across the country in its investigation.

The DOJ also release suggests that this massive alleged bribery scheme is also being investigated on both sides of the Atlantic as the "United Kingdom's City of London Police executed seven search warrants in connection with their own investigations into companies involved in the foreign bribery conduct that formed the basis for the indictments."

Stay tuned for more specifics in this massive case - which I will refer to as "Africa Sting."

1 comment:

hey professor, your link to Daniel Alvirez's background is actually brings up info on his father, David Alvirez. Lets not place the sins of the son on the father. David Alvirez served our Nation Honorably. Need to correct your link..